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August 8, 2014

US: Annie’s sticks to FY targets after mixed Q1

US food group Annie's has kept its forecasts for annual sales and earnings despite a mixed first quarter.

By Dean Best

US food group Annie’s has kept its forecasts for annual sales and earnings despite a mixed first quarter.

Annie’s made a net loss of US$1.2m during the quarter thanks to stock-based charges and professional services fees. However, Annie’s said it broke even on an adjusted net income basis.

The company’s gross margin for the quarter was 28.2% in the three months to 30 June, compared to an adjusted gross margin of 38.8% in last year’s first quarter.

Annie’s pointed to “higher commodity costs, particularly organic wheat, as well as higher trade spending and mix changes”. The depressed margin led to a fall in gross profit.

Annie’s reported net sales of $43.3m, up 10.1% year-over-year. Sales related to planned contract manufacturing revenues associated with the Joplin acquisition contributed year-over-year growth 5.2 percentage points of the growth. Net sales from the base business grew by 4.9 percentage points, led by double-digit growth in snacks.

The company reaffirmed its full-year guidance, including adjusted net sales growth of 18% to 20% and adjusted diluted EPS of $0.88 to $0.95.

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